CRMs: The Link Between Lawyer and Client

This deficiency has become especially egregious as clients have become more powerful. During the recent economic downturn, legal spend budgets decreased, more work was brought in-house and clients started applying tougher criteria to their law firm choices. Law firms had to compete for work, in some cases, for the first time. Lawyers saw clients they thought were clients-for-life take their business elsewhere. Today, lawyers need to do more than just provide good legal service. They need to find out what their clients expect and where they may be falling short. They also need to look for ways to provide their services more efficiently and effectively.

According to another ALM survey (“The 2012 Law Firm Leaders Survey”), 61% of U.S. firms say they have a formal client feedback program. But you wouldn't know it from the in-house counsel we spoke to or from another statistic found in the same survey: Just 3% of the firms said they have asked their top 20 clients about their performance in the past year. It appears firms have set a very low bar for actually implementing the programs they have on paper. In many cases, this is due to partner resistance.

“While well intentioned, many lawyers seldom ask what they can do better,” notes DLA Piper Partner Todd Toral. “Most partners get caught up in the actual work and don't think about or have time to bring an analytical approach to client service,” adds Jeffrey Hessekiel, Senior Counsel at Arnold & Porter. Some partners resist because they don't want anyone else interacting with their clients or finding out they have delivered less-than-stellar performance. Today's economic realities make that kind of attitude unacceptable in most firms. As one law firm executive explained: “All clients are firm clients. No single practice group or partner can ever execute on the entire needs of the client. We create multiple touch points to ensure that all of a client's needs are met.”'

Another reason feedback isn't happening is that many lawyers have worked with their key clients for decades. Their relationships started because they were friends, knew each other socially, or were referred by family members or other acquaintances. The personal connections have turned into long-term professional relationships, which do not naturally lend themselves to serious discussions of their performance. If the client ends up being disappointed with some aspect of the lawyer's or firm's service, it can be difficult for them to bring it up.

The Role of the CRM

This has led to the creation of a new role ' that of the Client Relationship Manager (CRM). Some law firms have given the role titles like Chief Client Development Officer, Director of Client Service, and Global Client Relationship Partner. Companies in other fields, including Salesforce.com and Cisco, have also created positions to handle this task, assigning it creative titles like VP of Customers-for-Life, VP of Customer Advocacy and Director of Customer Listening. Whatever they're called, these people become the firm's primary contact for clients. “They try to focus on the entire 'customer experience' rather than on individual transactions.” (“The Magic of Good Service,” The Economist, Sept. 22, 2012). They ask clients questions like how are we doing, how can we do better, and what do you need from us to make your job easier. They focus not just on the client's current needs, but on what they are likely to need in the future.

On the off chance you're thinking, “Doesn't every firm have a CRM by now?” here are some other pertinent statistics. The aforementioned ALM survey of law firm administrators found that of those firms that do conduct some kind of client feedback, 33% leave it to partners; 30% assign it to business development directors; and 14% hand it off to managing partners. Only 9% have client-focused specialists.

The people being deployed to talk to clients should have this as their primary responsibility. They should not be worried about practicing law and delivering legal services, running a multi-billion dollar business, or selling additional services. Having a third party handle this task takes the personal element out of the discussion and gives the client someone to go to if they're upset about something, without negatively affecting the working relationship with their attorney.

Facilitating Cross-Selling

Many of those surveyed by Acritas say they ditched a firm once their job ended, because they were not familiar with the firm's other services or their different attorneys. “Firms should work harder to broaden their client relationships. They should try to emulate the agency-style approach of account management, so the relationship doesn't end with a specific job or case,” observes Shepherd. Though partners are encouraged to think about the various services their firm can provide their clients, it is not usually foremost in their minds.

This is where a dedicated CRM can be extremely valuable. During the course of their feedback interviews, the CRM may discover that the client has other legal needs. For instance, in one case we know of, the CRM learned that the client was unhappy with the firm that was handling its real estate work. The CRM introduced the client to his firm's real estate group and ended up securing the work. Once the CRM knows what the client needs, he can put together effective teams to make a pitch, without hurting people's feelings or running into quid-pro-quo issues between attorneys, thus eliminating the internecine squabbles that often erupt when different partners compete for the same business. Once again, the CRM is able to take the personal element out of the relationship and create more opportunities for the firm, while providing a broader array of services to the client.

It matters how you solicit the information, though. Firms should not confuse business development and sales calls with customer service. “The purpose of the meeting can't be seen as a selling opportunity. It must be focused on receiving feedback on the firm's performance,” confirms Lenhart. According to Jan Anne Dubin, Principal of Jan Anne Dubin Consulting and former Director of DLA Piper's global client program, “There are many ways to get this information and nurture the relationship. Law firms should set up formal feedback programs in addition to informally engaging clients on these topics during shared activities. Written questionnaires and surveys alone seem to be the worst format for eliciting feedback, since they tend to provide pat answers and limited opportunity to explore things in any kind of depth. It is best to engage the client face-to-face and allow him/her to elaborate or free-associate as you delve into their views and feelings about their needs and preferences.”

Lenhart agrees. “Most year-end surveys end up in the trash. The firm/CRM needs to set up a specific meeting with the client and make sure they are targeting the right person. Too many firms go to the GC for feedback, even though they're not usually the one giving out the work or the one who has direct experience with the service.”

A Recruiting Advantage

Having a dedicated CRM can help distinguish your firm, not only to clients, but to lateral partners as well. Most partners will be thrilled to learn there is a formal process for integrating his/her clients and may even see this as a reason to join a particular firm ' “It's a firm that listens to its clients about customer service issues and makes sure it addresses their concerns.” A CRM can also ease clients' concerns that they are going to get lost in the transition. He/she will likely set up a meeting as soon as possible (after conflicts have been cleared and the deal is official) to hear about the client's needs and service/performance expectations.

Another plus? Many in-house counsel told us they have wasted lots of time trying to figure out who to take their problems to in their outside law firms. It can be overwhelming, particularly in large firms, to determine who to go to for billing issues, conflicts, staffing decisions, professional mistakes and/or malpractice concerns. Even though some partners would like to be the only person their clients contact, this is often extremely inefficient. Having a dedicated Client Relationship Manager can solve this problem.'

A Cultural Shift

Having a regular client feedback process and a person dedicated to this function, sharing the findings with attorneys and making the requested changes helps firms establish a “Culture of Service.” Lawyers learn how to improve their performance without having to engage in a sometimes awkward and difficult exercise. And clients appreciate being able to weigh in about their experiences and having their opinions taken seriously.

This last point is extremely important. The client feedback process will only be effective if CRMs are empowered to make actual changes. Clients, without exception, say they are happy to be asked about a firm's services, but they will quickly tire of the process and think it is just for show if their opinions are not respected and acted upon. It is much worse to ask the questions and not change the unsatisfactory behavior, than to have never asked in the first place.

“If management knows of a problem and fixes it, it communicates a lot to the client,” confirms Shepherd. The converse is also true: If you ask, and don't fix the problem or change the behavior, it will make the client lose faith in the process and the firm.

Since the goal is to ensure that clients are happy with their attorney's and their firm's services, it is surprising that more firms haven't made this part of their business model. As Shepherd notes: “One of the things we did not expect was the level of complacency and arrogance that we found. In this difficult market, in the face of rather flat demand, too many firms and lawyers are taking their clients for granted.”

Bottom line? Client feedback is extremely important. Once your firm institutionalizes the process, you will be able to determine if clients are unhappy, define the areas that need improvement and create a plan to hopefully rescue dissatisfied clients before they defect.

It may require a cultural shift for many firms and partners ' to move from a primarily reactive role (waiting for clients to come to you with problems) to a proactive one (finding out if clients have issues with your firm's performance and making the necessary changes), but it is essential if you want to retain your current clients, offer a broader array of services to them, establish a climate that will enable you to secure more new business in the future, and provide a process for your firm's attorneys to regularly and continuously improve their performance. Firm leaders today emphasize the importance of bringing in new business; they should be just as, if not more interested in what they can do to keep and expand the business they already have.

David Maurer is a Managing Director at global legal search firm Major, Lindsey & Africa. Prior to joining MLA, he was an in-house counsel at Morgan Stanley. He can be reached at 415-646-0344 or [email protected].

'

SPECIAL OFFER: Twitter, LinkedIn, Facebook and Google+ followers can get an online subscription to Law Firm Partnership & Benefits Report for $299. Click here, select Digital Only'and use promo code'LFPBOL299 at checkout. This offer is valid for new subscribers only.

'

One-third of the global in-house legal departments surveyed by market research firm Acritas (which annually surveys the General Counsel of the largest corporations in 45 countries on their experiences with their outside law firms) dropped at least one of their law firms in the past year. Respondents listed the following as their main reasons for changing firms: pricing (compared with the value delivered), less-than-stellar legal expertise, and insufficient customer service. In addition, they claimed that many firms are inefficient and spend resources unwisely, lack project management skills, and are often slow to respond, which is especially glaring in today's high-speed, highly-connected world.

Acritas CEO Lisa Hart Shepherd says a lot of these problems boil down to a lack of communication between the firms and their clients. “The main problem with law firms is that they aren't asking their clients often enough and proactively enough how they're doing.” A recent ALM survey (“Legal Client Relationship Management: The Elusive Essential”) backs this up. It found that 77% of law firm administrators believe their firms are not focused enough on understanding clients and their needs. “Firms need to ask these questions,” agrees Chris Lenhart, Senior VP & Associate General Counsel at U.S. Bank, “but in my experience, 98% of them don't.”

Client-Centric Climate

This deficiency has become especially egregious as clients have become more powerful. During the recent economic downturn, legal spend budgets decreased, more work was brought in-house and clients started applying tougher criteria to their law firm choices. Law firms had to compete for work, in some cases, for the first time. Lawyers saw clients they thought were clients-for-life take their business elsewhere. Today, lawyers need to do more than just provide good legal service. They need to find out what their clients expect and where they may be falling short. They also need to look for ways to provide their services more efficiently and effectively.

According to another ALM survey (“The 2012 Law Firm Leaders Survey”), 61% of U.S. firms say they have a formal client feedback program. But you wouldn't know it from the in-house counsel we spoke to or from another statistic found in the same survey: Just 3% of the firms said they have asked their top 20 clients about their performance in the past year. It appears firms have set a very low bar for actually implementing the programs they have on paper. In many cases, this is due to partner resistance.

“While well intentioned, many lawyers seldom ask what they can do better,” notes DLA Piper Partner Todd Toral. “Most partners get caught up in the actual work and don't think about or have time to bring an analytical approach to client service,” adds Jeffrey Hessekiel, Senior Counsel at Arnold & Porter. Some partners resist because they don't want anyone else interacting with their clients or finding out they have delivered less-than-stellar performance. Today's economic realities make that kind of attitude unacceptable in most firms. As one law firm executive explained: “All clients are firm clients. No single practice group or partner can ever execute on the entire needs of the client. We create multiple touch points to ensure that all of a client's needs are met.”'

Another reason feedback isn't happening is that many lawyers have worked with their key clients for decades. Their relationships started because they were friends, knew each other socially, or were referred by family members or other acquaintances. The personal connections have turned into long-term professional relationships, which do not naturally lend themselves to serious discussions of their performance. If the client ends up being disappointed with some aspect of the lawyer's or firm's service, it can be difficult for them to bring it up.

The Role of the CRM

This has led to the creation of a new role ' that of the Client Relationship Manager (CRM). Some law firms have given the role titles like Chief Client Development Officer, Director of Client Service, and Global Client Relationship Partner. Companies in other fields, including Salesforce.com and Cisco, have also created positions to handle this task, assigning it creative titles like VP of Customers-for-Life, VP of Customer Advocacy and Director of Customer Listening. Whatever they're called, these people become the firm's primary contact for clients. “They try to focus on the entire 'customer experience' rather than on individual transactions.” (“The Magic of Good Service,” The Economist, Sept. 22, 2012). They ask clients questions like how are we doing, how can we do better, and what do you need from us to make your job easier. They focus not just on the client's current needs, but on what they are likely to need in the future.

On the off chance you're thinking, “Doesn't every firm have a CRM by now?” here are some other pertinent statistics. The aforementioned ALM survey of law firm administrators found that of those firms that do conduct some kind of client feedback, 33% leave it to partners; 30% assign it to business development directors; and 14% hand it off to managing partners. Only 9% have client-focused specialists.

The people being deployed to talk to clients should have this as their primary responsibility. They should not be worried about practicing law and delivering legal services, running a multi-billion dollar business, or selling additional services. Having a third party handle this task takes the personal element out of the discussion and gives the client someone to go to if they're upset about something, without negatively affecting the working relationship with their attorney.

Facilitating Cross-Selling

Many of those surveyed by Acritas say they ditched a firm once their job ended, because they were not familiar with the firm's other services or their different attorneys. “Firms should work harder to broaden their client relationships. They should try to emulate the agency-style approach of account management, so the relationship doesn't end with a specific job or case,” observes Shepherd. Though partners are encouraged to think about the various services their firm can provide their clients, it is not usually foremost in their minds.

This is where a dedicated CRM can be extremely valuable. During the course of their feedback interviews, the CRM may discover that the client has other legal needs. For instance, in one case we know of, the CRM learned that the client was unhappy with the firm that was handling its real estate work. The CRM introduced the client to his firm's real estate group and ended up securing the work. Once the CRM knows what the client needs, he can put together effective teams to make a pitch, without hurting people's feelings or running into quid-pro-quo issues between attorneys, thus eliminating the internecine squabbles that often erupt when different partners compete for the same business. Once again, the CRM is able to take the personal element out of the relationship and create more opportunities for the firm, while providing a broader array of services to the client.

It matters how you solicit the information, though. Firms should not confuse business development and sales calls with customer service. “The purpose of the meeting can't be seen as a selling opportunity. It must be focused on receiving feedback on the firm's performance,” confirms Lenhart. According to Jan Anne Dubin, Principal of Jan Anne Dubin Consulting and former Director of DLA Piper's global client program, “There are many ways to get this information and nurture the relationship. Law firms should set up formal feedback programs in addition to informally engaging clients on these topics during shared activities. Written questionnaires and surveys alone seem to be the worst format for eliciting feedback, since they tend to provide pat answers and limited opportunity to explore things in any kind of depth. It is best to engage the client face-to-face and allow him/her to elaborate or free-associate as you delve into their views and feelings about their needs and preferences.”

Lenhart agrees. “Most year-end surveys end up in the trash. The firm/CRM needs to set up a specific meeting with the client and make sure they are targeting the right person. Too many firms go to the GC for feedback, even though they're not usually the one giving out the work or the one who has direct experience with the service.”

A Recruiting Advantage

Having a dedicated CRM can help distinguish your firm, not only to clients, but to lateral partners as well. Most partners will be thrilled to learn there is a formal process for integrating his/her clients and may even see this as a reason to join a particular firm ' “It's a firm that listens to its clients about customer service issues and makes sure it addresses their concerns.” A CRM can also ease clients' concerns that they are going to get lost in the transition. He/she will likely set up a meeting as soon as possible (after conflicts have been cleared and the deal is official) to hear about the client's needs and service/performance expectations.

Another plus? Many in-house counsel told us they have wasted lots of time trying to figure out who to take their problems to in their outside law firms. It can be overwhelming, particularly in large firms, to determine who to go to for billing issues, conflicts, staffing decisions, professional mistakes and/or malpractice concerns. Even though some partners would like to be the only person their clients contact, this is often extremely inefficient. Having a dedicated Client Relationship Manager can solve this problem.'

A Cultural Shift

Having a regular client feedback process and a person dedicated to this function, sharing the findings with attorneys and making the requested changes helps firms establish a “Culture of Service.” Lawyers learn how to improve their performance without having to engage in a sometimes awkward and difficult exercise. And clients appreciate being able to weigh in about their experiences and having their opinions taken seriously.

This last point is extremely important. The client feedback process will only be effective if CRMs are empowered to make actual changes. Clients, without exception, say they are happy to be asked about a firm's services, but they will quickly tire of the process and think it is just for show if their opinions are not respected and acted upon. It is much worse to ask the questions and not change the unsatisfactory behavior, than to have never asked in the first place.

“If management knows of a problem and fixes it, it communicates a lot to the client,” confirms Shepherd. The converse is also true: If you ask, and don't fix the problem or change the behavior, it will make the client lose faith in the process and the firm.

Since the goal is to ensure that clients are happy with their attorney's and their firm's services, it is surprising that more firms haven't made this part of their business model. As Shepherd notes: “One of the things we did not expect was the level of complacency and arrogance that we found. In this difficult market, in the face of rather flat demand, too many firms and lawyers are taking their clients for granted.”

Bottom line? Client feedback is extremely important. Once your firm institutionalizes the process, you will be able to determine if clients are unhappy, define the areas that need improvement and create a plan to hopefully rescue dissatisfied clients before they defect.

It may require a cultural shift for many firms and partners ' to move from a primarily reactive role (waiting for clients to come to you with problems) to a proactive one (finding out if clients have issues with your firm's performance and making the necessary changes), but it is essential if you want to retain your current clients, offer a broader array of services to them, establish a climate that will enable you to secure more new business in the future, and provide a process for your firm's attorneys to regularly and continuously improve their performance. Firm leaders today emphasize the importance of bringing in new business; they should be just as, if not more interested in what they can do to keep and expand the business they already have.

David Maurer is a Managing Director at global legal search firm Major, Lindsey & Africa. Prior to joining MLA, he was an in-house counsel at Morgan Stanley. He can be reached at 415-646-0344 or [email protected].

'

SPECIAL OFFER: Twitter, LinkedIn, Facebook and Google+ followers can get an online subscription to Law Firm Partnership & Benefits Report for $299. Click here, select Digital Only'and use promo code'LFPBOL299 at checkout. This offer is valid for new subscribers only.

'